Onik New Energy Australia Pty Limited v Henderson

Supreme Court of NSW|2016-02-18

Judgment

HER HONOUR: This is an appeal against the decision of a Magistrate who dismissed the plaintiff's statement of claim for want of prosecution and awarded the defendants the costs of the proceedings.
By summons filed 5 May 2015, the plaintiff seeks orders, firstly, that leave be granted to appeal from the whole of the decision of his Honour Magistrate Dunleavy dated 10 April 2015; secondly, that the appeal be allowed; thirdly that the judgment be set aside; and fourthly, that the matter be remitted to the Local Court for hearing.
The plaintiff is Onik Energy Australia Pty Limited ("Onik Energy"). The first defendant is Charlie Henderson. The second defendant is Taylor Athorn. The third defendant is Melissa Hayes. I shall refer to the three defendants collectively as "the defendants" except where I refer to an individual defendant. Onik Energy and the defendants were plaintiff and defendants respectively in the Local Court.
Onik Energy relied upon three affidavits of its solicitor Raymond Jonathan Abrahams sworn 29 July 2015, 7 October 2015 and 16 November 2015. The defendants relied upon the affidavit of their solicitor Leigh Christopher Anderson sworn 14 September 2015.

The appeal

Section 40(2) of the Local Court Act 2007 (NSW) relevantly provides that a party who is dissatisfied with an interlocutory judgment of the Local Court may appeal to the Supreme Court, but only by leave of the Supreme Court.

Whether leave to appeal should be granted

The first issue to be determined is whether leave to appeal should be granted on the basis that the decision is an interlocutory one: s 40(2). The defendants oppose the granting of leave to appeal.
In Be Financial Pty Ltd v Das [2012] NSWCA 164, the Court of Appeal set out the principles to be considered in deciding whether leave to appeal should be granted. At [32], [33] and [35] Basten JA stated: "[32] The principles governing cases such as these have recently been restated in Zelden v Sewell; Henamast Pty Ltd v Sewell [2011] NSWCA 56. As Campbell JA noted (with the agreement of Young JA) at [22]: 'It is of some importance to reiterate the principles that were stated in Carolan v AMF Bowling Pty Limited [1995] NSWCA 69, where Sheller JA said that an applicant for leave must demonstrate something more than that the trial judge was arguably wrong in the conclusion arrived at. Cole JA relied on a principle that where small claims are involved, it is important that there be early finality in determination of litigation, otherwise the costs that will be involved are likely to swamp the money sum involved in the dispute.' [33] In Jaycar Pty Ltd v Lombardo [2011] NSWCA 284 Campbell JA, with the agreement of Young and Meagher JJA, expanded on his summary of Carolan, noting that Kirby P had recognised 'that ordinarily it was appropriate to grant leave to appeal only concerning matters that involve issues of principle, questions of general public importance or an injustice which is reasonably clear, in the sense of going beyond [what is] merely arguable': at [46]. … [35] In Coulter v The Queen [1988] HCA 3; 164 CLR 350, dealing with a challenge to a refusal of the South Australian Full Court to grant leave to appeal in a criminal matter, the majority noted that a leave requirement was a preliminary procedure 'recognised by the legislature as a means of enabling the court to control in some measure the volume of appellate work requiring its attention': at 356 (Mason CJ, Wilson and Brennan JJ). That statement is clearly applicable to civil, as well as criminal, appellate jurisdiction."
Onik Energy submitted that leave to appeal should be granted for the following reasons. Firstly, that the Magistrate clearly erred in his finding that there was a want of prosecution; secondly, that to allow the judgment to stand would be to permit the defendants to take the benefit of it notwithstanding that it was procured in part as a result of the conduct of the defendants' legal representative in failing to advise the Magistrate that the plaintiff's legal representative had spoken to him the previous day and informed him that the plaintiff's lay evidence was ready and would be filed and served by 13 April 2015 being the next business day; thirdly, that the judgment denies the plaintiff sums to which it should be entitled if it succeeds in the substantive matter, namely, its costs expended on the proceedings to date; fourthly, that the judgment renders the plaintiff liable to pay the defendants' costs of the proceedings to date which is unfair and unjust given that the plaintiff was, at the time the Magistrate made his findings, ready, willing and able to proceed with the matter; and finally, that the plaintiff should only be liable for the defendants' costs in the event that the plaintiff is unsuccessful in the substantive matter.
Counsel for the defendants further submitted that it is well established that the requirement for leave to appeal is a "control device" that both promotes the availability and efficiency of justice and places a constraint on the costs of litigation: see Coulter v R (1988) 164 CLR 350 at 359 per Deane and Gaudron JJ. Therefore, it is necessary for Onik Energy to point to some other factor over and above the error in principle which the Magistrate is said to have made apart from an assertion that it has suffered a detriment: see Ashi Pty Limited v Karasco Investments Pty Ltd [2009] NSWSC 780 at [35].
Counsel for the defendants submitted that the proceedings involves relatively small amounts of money and there is no barrier to Onik Energy commencing further claims against the defendants and that the Magistrate made the orders on that basis (T12.35). The defendants say that the only detriment that Onik Energy has pointed to is the requirement to pay costs and therefore leave to appeal the proceedings should not be granted.
I take into account the following factors. As Onik Energy can recommence proceedings, the only detriment it suffers is that it has to pay costs thrown away in the Local Court. As well, the appeal does not raise any issue of principle, any question of public importance and the injustice is not reasonably clear. I decline to grant leave to appeal. However, in the event that I am wrong, I have determined the issues raised in the grounds of appeal.
The approach that I will adopt is to take into account that the Magistrate's remarks were made in the context of a busy Magistrate's Court so my focus should be upon the substance of what the Magistrate said and did. Any other approach would impose an intolerable burden on magistrates: see Acuthan v Coates (1986) 6 NSWLR 472; (1986) 24 A Crim R 304 per Kirby P at 479.

Grounds of appeal

Onik Energy's grounds of appeal can be summarised as follows: (a) That the Magistrate erred in entertaining a strike out application by the defendants without notice to Onik Energy and in so doing denied Onik Energy procedural fairness. (b) That the evidence before the Magistrate could not have sustained a finding that there was a want of prosecution by Onik Energy. (c) That the Magistrate erred in finding that Onik Energy's expert evidence was not ready. (d) The finding that there was a want of prosecution by reason of Onik Energy's failure to file and serve its lay evidence cannot be sustained as the finding was procured due to the defendants' legal representative misleading the Court. (e) That the Magistrate erred in finding that an application to vacate the hearing date had been made by Onik Energy as it was not ready to proceed.

The proceedings in the Local Court

On 14 April 2014, Onik Energy filed a statement of claim in the Local Court in the General Division. It pleads that there are two contracts between Onik Energy and the first defendant; one contract between Onik Energy and the second defendant; and one contract between Onik Energy and the third defendant. The contracts are partly written and partly oral. Despite individual contracts involving each defendant, all defendants are named in the one statement of claim. Pursuant to each contract Onik Energy's predecessor, Sunburst Solar Pty Ltd, installed a 4.5 kilowatt solar electrical system on the properties of the defendants. It is alleged that the defendants have each failed to pay for the systems or allow Onik Energy access to the defendants' properties to remove the systems. The statement of claim seeks payment of the sum of $38,640 and other alternative relief.
On or about 21 May 2014, a defence was filed by the first and second defendants. On or about 11 June 2014, a defence was filed and served by the third defendant.
After the first mention date on 6 August 2014, proceedings were ordered to be moved from the Local Court in Sydney to the Local Court in Wentworth on the motion of the defendants.
In terms of case management, it appears nothing happened between 21 May 2014 and the first directions hearing on 10 October 2014.

Directions and pre-trial hearings in the Local Court

On 10 October 2014, these proceedings were adjourned to 5 December 2014. It was noted that there was an application for leave to call expert evidence.
On 9 January 2015, the following directions were made. Leave was granted to file and serve a reply and for each party to lead expert evidence; the experts were to prepare a joint report; the parties were to exchange all statements on or before 6 March 2015; the matter was listed for review on 10 April 2015; and the matter was listed for hearing on 5 June 2015.
There was a delay in the finalisation of Onik Energy's expert evidence because the defendants had not supplied their power bills. These power bills were required by Onik Energy's expert so he could complete his report. By consent it was agreed that the parties would relist the matter on 6 March 2015 in order to seek an extension of the time for service of the evidence.

First pre-trial hearing - 6 March 2015

On 6 March 2015, the Magistrate informed the defendants' solicitor that they should provide their power bills to Onik Energy urgently. The defendants' solicitor, Mr Anderson, advised the Magistrate that his clients would be providing them within a few days. (Aff, Abrahams, 29/7/2015 at [32]). The Magistrate ordered that the parties exchange evidence by 3 April 2015. (Note that this was Good Friday and the next business day after 3 April 2015 was 7 April 2015.) Mr Abrahams, the solicitor for Onik Energy, sought to vacate the hearing date on the basis that he had a matter listed for a four day hearing in Melbourne on 5 June 2015. (Aff, Abrahams, 1/3/2015 at [3]). The solicitor for the plaintiff consented to the hearing date being vacated. Not surprisingly, in these circumstances the Magistrate refused to vacate the hearing date. The next scheduled pre trial directions hearing remained listed on 10 April 2015. The hearing date of 5 June 2015 was confirmed.
On 20 March 2015, the defendants provided their power bills to the plaintiff's solicitors.
On 9 April 2015, Onik Energy served its expert evidence on the defendants' solicitor. The expert's report was served by email. The full report comprised of some 260 pages and there is a dispute between the parties as to whether the attachments to that report were served.

The telephone conversation - 9 April 2015

It is common ground that on 9 April 2015 (the day before the next pre-trial review hearing), Mr Abrahams had a telephone conversation with Mr Anderson.
In relation to Onik Energy's lay evidence, Mr Abrahams' version of the telephone conversation is as follows. Mr Abrahams says that he advised Mr Anderson: "…My lay evidence material has been delayed by our counsel. There are only 2 lay witnesses. Melissa Berg and Mr Graham. I'm letting you know that I will be leaving my office this afternoon in preparation for the Jewish holyday of Passover tomorrow and that I will not be in office from this afternoon and tomorrow because of the Jewish holyday. I will therefore only be able to serve our lay evidence material on you on Monday. Our counsel has informed me that our evidence will be provided in the time that it takes to swear the affidavits. He was delayed finalising them due to a Court matter taking longer than he expected… All we can do is let the Court know the reason and that our lay evidence will be exchanged by close of business on Monday". (Aff, Abrahams, 29/7/2015 at [45]).
Mr Anderson advised Mr Abrahams that "I am arranging to serve our evidence on your agent". (Aff, Abrahams, 29/7/2015 at [45]).
Mr Anderson's version is as follows. He does not recall any words spoken by Mr Abrahams that amounted to a promise to serve witness statements on the following Monday. He does recall that Mr Abrahams said words to the effect "that the delay had been caused by counsel and that counsel said the evidence will be provided in the time that it takes to swear affidavits." He says that Mr Abrahams did not tell him that he had arranged for the two lay witnesses to attend his office on the following Monday to sign the witness statements. Mr Anderson's understanding at the conclusion of the telephone conversation was that counsel had not finalised the witness statements and that Mr Abrahams would get them to Mr Anderson as soon as he could in the following week.
Mr Anderson does not agree that he said that he was arranging to serve the defendants' evidence on Mr Abrahams' agent because he had actually served evidence by way of a witness statement with attachments and an expert report on Mr Abrahams' agent, Hugh Middleton of Martin Irwin & Richards, the previous day (8 April 2015). It is Mr Anderson's recollection that he did not say "Mr Dunlevy won't be happy about any delay in serving your evidence." Instead he said words to effect that "the Magistrate will go berserk." (Aff, Anderson, 14/9/2015 at [13]).
Mr Anderson stated that during the telephone conversation with Mr Abrahams, Mr Anderson did not form an opinion as to what he would do at the directions hearing in light of Onik Energy's failure to serve evidence. He cannot recall when he decided that he would make submissions at the directions hearing that Onik Energy's statement of claim should be struck out. (Aff, Anderson, 14/9/2015 at [15]).
On 9 April 2015, Mr Abrahams wrote to Mr Anderson as follows: "I refer to our conversation concerning the exchange of evidence and that you have arranged today to provide our agent with your client's affidavit and expert evidence. We enclose the plaintiff's expert report of Mr Glen Morris dated 6 April 2015, without the attachments. There are approximately 260 pages. The email accompanying this letter contains a dropbox link which you can click onto and the dropbox contains the entire report and all the attachments. In regard to the affidavit evidence of Mr Graham and Ms Berg our counsel Mr Bennett has been delayed in finalising the affidavits due to court commitments that ran longer than he anticipated. Mr Bennett has requested that His Honour be informed at the hearing tomorrow that the evidence will be served in the amount of time it takes to be sworn once he has completed his review of the affidavits today. Mr Abrahams will be out office (sic) from around 3pm today for the Jewish holyday this evening and tomorrow and will return to office on Monday 13 April. We will serve the evidence by close of business on Monday 13 April 2015. We apologise for the delay."
Mr Anderson says that as a result of receipt of Mr Abrahams' letter of 9 April 2015 stating that counsel was still reviewing the lay witnesses' affidavits, he remained of the view that there was no guarantee that he would receive the evidence by the following Monday. (Aff, Anderson, 14/9/2015 at [14]).
On 9 April 2015, Mr Abrahams emailed his agent, Mr Middleton, as follows: "We remind you of the hearing listed for tomorrow 10 April 2015. Being a Jewish Holyday I will not be in office. Below is my email to Leigh Anderson care of his assistant Jennifer Westcombe and I also enclose my letter to him. You will note that I have served on him our expert's report. I have in regard to the plaintiff's evidence of Mr Graham and Ms Berg you will note that our counsel Mr Bennett has been delayed in reviewing the affidavits and sending them to me (sic). He has asked that we inform his honour at the hearing tomorrow that this evidence will be served in the amount of time it takes to be sworn once Mr Bennett has completed his review of the affidavits to day. My letter states that this evidence will be served by close of business Monday, 13 April 2015. The other matter that has to be dealt with tomorrow is the request for a new trial date. You have the writer's affidavit in support of that including the support of Mr Anderson. I will also telephone you later today concerning the hearing tomorrow."

Pre trial directions - 10 April 2015

On 10 April 2015, Mr Anderson had a conversation with Mr Middleton at the Wentworth Local Court at about 9.30 am or 10.00 am. During that conversation he stated to Mr Middleton that he would be making submissions that the statement of claim should be struck out. The matter was called on a few hours later just prior to lunch. Mr Anderson's evidence is that, given Onik Energy was represented at the directions hearing by Mr Middleton, he did not consider that it was his obligation to inform the Court as to his understanding of the state of readiness of Onik Energy's evidence or when its evidence was going to be filed. (Aff, Anderson, 14/9/2015 at [16] and [17]).
On 10 April 2015, when the matter came before the Magistrate Mr Middleton, who appeared on behalf of Onik Energy, made an application to vacate the hearing as Onik Energy's solicitor, Mr Abrahams, who had had carriage of the matter for a considerable period of time, had a trial listed for hearing in the County Court of Victoria on 5 June 2015. Mr Anderson, solicitor appearing on behalf of the defendants, made an oral application that Onik Energy's proceedings be struck out.

The rule and practice note

Uniform Civil Procedure Rules 2005 (NSW) ("UCPR") rule 12.9 relevantly reads: "12.9 Additional grounds for dismissal of proceedings by District Court or Local Court (1) This rule applies to proceedings in the District Court or the Local Court that have been commenced by statement of claim or in which a statement of claim has been filed. (2) The court may, of its own motion, make an order dismissing the proceedings if: … (c) the proceedings are not otherwise disposed of, within 9 months after the statement of claim is filed. (3) Such an order may be made without notice to the plaintiff or any other party. (4) Such an order may not be made if there are any notices of motion or other applications in the proceedings that are yet to be determined."
The Case Management of Civil Proceedings in the Local Court Practice Note Civ 1 relevantly reads (at [7]): "Dismissal 7.1 If within 9 months after a statement of claim has been filed: (a) … (b) …, or (c) The proceedings are not otherwise disposed of, the proceedings are on the Court's own motion and order dismissed: UCPR 12.9(4). [I think that "dismissed" is a typographical error.] 7.2 The court will not dismiss proceedings under UCPR 12.9 if there are any notice of motion or other applications in the proceedings that have yet to be determined: UCPR 12.9(4)."

The Magistrate's judgment

On 10 April 2015, at the outset of the directions hearing, the Magistrate stated: "… And so the proceedings are listed for a second review and so I have some fresh material that has been filed, including an affidavit from the solicitor for the plaintiff. And then there's a statement from Melissa Hayes, and a statement from Charlie Henderson, a report from Mr K Dare. And so I haven't had an opportunity to read through the material but is the procedural affidavit from the solicitor with a view towards vacating the hearing date is it?" (T1.20-26).
Mr Middleton indicated that it was. The following exchange then took place between the Magistrate and Mr Anderson: "HIS HONOUR: …I'll have a look through the material over lunch and I suppose if I do vacate the hearing date - they're sort of interrelated in that is as I understand it the plaintiff is not ready to proceed because they haven't been able to prepare their case that I would have to make orders upon vacation for the material to be filed so that the defendant knows what they have to address. ANDERSON: Yes I'll be making submissions the plaintiff's proceedings should be struck out. HIS HONOUR: Mm, all right then so the defendant's position is that - well I suppose I don't know whether I can strike them out today but I can confirm the hearing date on the basis that potentially the plaintiff won't be able to prove its case unless I previously made a Guillotine order, which I don't think I have. But what I'll do just so I can get a better grip on everything I'll have a read through the material and then I'll return to the matter after the luncheon adjournment." (T1.44-2.10).
When the hearing resumed after lunch, the solicitor for the defendants made submissions as to why these proceedings should be struck out. In summary, his submissions were as follows. Firstly, as a result of the three separate proceedings being run together, the amount claimed is for $38,000 but is more likely to be in the range of $13,000 to $15,000. Secondly, there does not seem to be a dispute that a term of the contract was that the defendants were to receive from Onik Energy a solar feed in tariff of 30 cents per kilowatt (this was admitted in the reply that had been filed). Thirdly, the plaintiff in the proceedings is not the same company as the one the defendants contracted with, being Sunburst Solar Pty Ltd. Fourthly, the defendants have filed all their evidence and have expended money on an expert, solicitors' fees and an application for change of venue from Wentworth to Sydney. Finally, he further submitted that the plaintiff had not served the defendants with any lay witness statements, and although they had received an expert report, it did not contain the annexures which the defendants' solicitor was told added up to some 260 pages. He informed the Court that the email from the plaintiff's solicitor did contain a link to another site of some description but that did not comply with the service rules.
Mr Middleton explained on behalf of the plaintiff that his instructing solicitor was observing a holyday and was not available. He had spoken to a staff member who informed him that there were witness statements which had been sent for checking by counsel. He could not say if the lay witness statements had been waiting on the preparation of the expert's report and referred to the delay in the supply of the powers bills. He urged the Magistrate not to make orders prejudicial to the plaintiff's case (T9; T10). I might add that some parts of the submissions are untranscribable. I have done my best to interpret them.
After hearing these submissions the Magistrate, in his ex tempore judgment, stated: "This is the second time that the matter has been listed for review, and in accordance with the Practice Direction that the Chief Magistrate has issued, this being a matter in the general division of the Court has been set down for hearing on 5 June 2015. The matter was listed for its first pre-trial review on 6 March 2015, and then due to non compliance with the time-table that had originally been fixed, the matter had to be listed for a second review date, that being today. There are several issues that the Court needs to consider, in terms of the position that each party has presented. In considering those issues, it's apposite to have regard to s 56 of the Civil Procedure Act. Section 56 lays down the overriding purpose of the Civil Procedure Act and the Uniform Civil Procedure Rules in their application to civil proceedings. That overriding purpose is that the application of the Act and the Rules, is to facilitate the just, quick and cheap resolution of the real issues between parties in contested civil proceedings, … The first issue relevant to vacating the hearing date, is that it seems that the hearing date is inconvenient for the solicitor for the plaintiff who in fairness to him has had carriage of the matter for a considerable period of time. It has been explained to me that the solicitor for the plaintiff, has a trial or hearing in the County Court of Victoria on 5 June and thus is prevented from appearing. This is an issue which was also raised last month at the first review. And so it has been an issue for sometime. As I stated during the course of submissions, the rules and the practice directions state that ordinarily a hearing date will not be vacated simply because an advocate or solicitor is unavailable. That is an application of a general rule that has been in place for some decades. Given that the hearing date is still two months away, and was essentially three months away at the time this issue was first raised, I do not see the plaintiff as being unduly prejudiced by the solicitor in question potentially not being able to attend. An agent could be instructed or counsel could be briefed. And so therefore I just cannot accept that as an appropriate ground upon which to vacate the hearing date. The second basis upon which the vacation is seemingly sought, is that the plaintiff at least as at today is not ready to proceed. As at today the plaintiff has not filed any evidence in these proceedings, this is despite the fact that two orders have been made for the filing and service of evidence. On the face of it I would have to accept that the plaintiff has raised a reasonable excuse for their expert report not being prepared, because there have been some obstacles in the form of outstanding particulars and invoices, that would be required by the expert in the preparation of his report. Apparently that issue has been remedied and a draft expert report if I can put it that way has been served. But seemingly, the expert report has not been finalised and certainly has not been filed for the Court, or properly served upon the solicitor for the defendants. There seems to be no rational explanation as to why any lay witnesses have failed to file their evidence. This seems to be a particular important issue, because the plaintiff as the case is presently pleaded, is not the party with whom the contracts were formed with the defendants. And so there will need to be some evidence dealing with Onik New Energy Australia Pty Limited standing to bring these proceedings and as to why the defendant should be liable to that company. There is also no evidence from the plaintiff's perspective as to the formation of the contract or the obligations of the respective parties under the contract. And so the failure to serve these statements is not merely a procedural one, or a procedural issue, it is of significant importance in terms of how the defendants may defend the case, and what position they might take as to whether they want to defend and perhaps even settle the case. With regards to the service of evidence, it seems that the defendants at one stage were in default at the first pre-trial review, but they have now properly served and indeed filed their evidence. And so they at least come to the pre-trial review today with clean hands, so to speak. In terms of broader issues involving the case, it has to be observed that based upon the submissions I have received today, which appeared to be properly put, these are proceedings which are not over a significant sum of money. Even before one takes into account any possible defences, the plaintiff's best position against all of the defendants combined, seems to be, that it might enjoy a judgment of just under $15,000 at best estimates. That is before one even takes into account what the defence might argue as to any liability to pay monies at all or if monies are payable, how much should be paid. That is relevant because as I indicated, one of the things that the Court needs to do is ensure that these proceedings are dealt with in a fair manner, that they are dealt with expeditiously and they are dealt with in a cheap or economical manner. And as a general rule, the less money there is in issue between the parties, the less money it is appropriate for the parties require each other to spend and for the Court to require the party to spend on issues such as preparing cases and paying lawyers. In terms of the application to vacate the hearing date on the basis that the plaintiff is not ready, this is the second time that the plaintiff has been in default and there seems to be not even terribly much of a plan that has been forwarded to Mr Middleton, who acts as agent for the plaintiff's solicitors as to how all of this might be remedied. In the circumstances I simply cannot accept that as a ground to vacate the hearing date. It would unduly lengthen the proceedings, it would inconvenience the defendants and it would put them to unnecessary and disproportionate costs. From their perspective they would probably also view vacating the hearing date as just deeply unfair, because by and large they have done what is required of them in terms of bringing these proceedings to a just disposition. And so the next issue I need to consider is whether I should simply confirm the hearing date, perhaps by making a self executing order at the same time, or whether I should dismiss the proceedings for non compliance, want of due dispatch or want of prosecution, however one wants to express that. Of course, dismissing proceedings can on one view be an extreme step, because it does bring a periphery finish to proceedings, without the Court really considering a case on its proper merits. However, one thing which does stand out with regards to dismissals as opposed to the entry of verdicts, is that if proceedings are dismissed, it is generally without prejudice as to re-commencement. And so even if I do dismiss the proceedings today, the plaintiff has an opportunity to stop and consider its position, to continue on with the preparation of evidence, and then to re-commence the proceedings in a superior position to the one they are in today and basically ready to proceed. From the defendant's perspective, they might not want that to happen, but at least as at today if I were to dismiss the proceedings they would see some degree of finality or enjoy some degree of comfort. What stands out in the application to dismiss is that when one drills down in a way that Mr Anderson has done, these proceedings are not over a large sum of money. Whilst there might be some complexity as the issues raised it seems that they have been the subject of undue delay. The plaintiff has now been in default twice as to the orders of the Court with regards to the filing and service of evidence. I also have some concerns as to the way that the defendants have been joined together, effectively as joint defendants in circumstances where the proceedings might have been better commenced by way of at least a separate statement of claim in relation to Ms Hayes, even if it was on the basis that the proceedings be conducted together. Because Ms Hayes has basically been dragged into a court case that is much bigger than the one that she would have been dragged into if she had been sued as an individual. The impact has also been that Ms Hayes has been dragged into a court case being conducted in the general division, as opposed to a court case being in the small claims division of the Court. Bearing in mind all of these factors, I have concerns that if I were to allow the proceedings to continue, it would be unfair to the defendants. I also feel particularly for Ms Hayes, that it would be unfair for her to be dragged into proceedings in the general division, when really hers is a small claim that she should be defending. I have concerns that to list this matter for hearing, even on the basis of a self executing order, would not be bringing about a quick enough disposition of the matter from the defendant's perspective. And I have genuine concerns that the defendants have probably already spent too much money on these proceedings and they should not be put to further costs associated with defending them further, when it is the plaintiff who is expected to prosecute these proceedings and the plaintiff who twice has failed to comply with directions of the Court, as well as other broader concerns I have. And so I accept that this is one of those rare cases whether it is appropriate to, DISMISS THE STATEMENT OF CLAIM THAT HAS BEEN FILED. AND SO I DO IN ACCORDANCE WITH THAT APPLICATION MADE ON BEHALF OF THE DEFENDANTS. AND THE STATEMENT OF CLAIM IS NOW DISMISSED. Of course without prejudice as to re-commencement, although without wishing to admonish the plaintiffs they should make sure that they are ready to proceed before they re-commence if they do that. And they should give some thought as to whether these three people are proper joint defendants, particularly with regards to Ms Hayes." (T10-T13.).
When asking Mr Middleton if there was any reason why the defendants should not have their costs his Honour stated, "Although in fairness to Mr Anderson I did foreshadow potentially dismissing the statement of claim on the last occasion." (T14.7-8). The Magistrate awarded costs against the plaintiff on an ordinary basis.

Consideration

I will now deal with each ground of appeal in turn.

(a) Was the plaintiff afforded procedural fairness? - appeal ground (a)

In relation to procedural fairness, the starting point is Kioa v West [1985] HCA 81; (1985) 159 CLR 550 at 584-585, where Mason J made the well-known statements that the law had developed to a point where it may be accepted that there is a common law duty to act fairly, in the sense of according procedural fairness, in the making of administrative decisions which affect rights, interests and legitimate expectations, subject only to the clear manifestation of a contrary statutory intention. Procedural fairness is the notion of a flexible obligation to adopt fair procedures that are appropriate and adapted to the circumstances of the particular case. The critical question in most cases is not whether the principles of natural justice apply. It is: what does the duty to act fairly require in the circumstances of the particular case?
In Re Minister for Immigration & Multicultural Affairs; Ex parte Lam [2003] HCA 6; (2003) 214 CLR 1, the High Court discussed the manner in which procedural fairness cases are approached by the courts. Gleeson CJ (at [37]) stated: "[37] …Fairness is not an abstract concept. It is essentially practical. Whether one talks in terms of procedural fairness or natural justice, the concern of the law is to avoid practical injustice."
In Kojima Australia Pty Ltd v Australian Chinese Newspapers Pty Ltd [2000] NSWSC 1153 and Wakim v Mathiew Pty Ltd t/as Dove Migration Services [2002] NSWSC 405, O'Keefe J (at 23-24 and at 20-21 respectively) made essentially identical observations on natural justice, now referred to as procedural fairness. His Honour, in noting the applicability of the requirements of natural justice to the Local Court, stated: "…This is clear from the nature of the function to be performed by that tribunal and the statutory recognition that is afforded to natural justice by s 69(2A) of the [Local Courts (Civil Claims)] Act. The contents of the requirements of natural justice is not fixed. The content is fluctuating. The overarching requirement is that of fairness (National Companies and Securities Commission v News Corp Ltd (1984) 156 CLR 296 at 312 per Gibbs CJ whom Brennan J agreed). For a court that normally involves a duty to: i. act judicially; ii. deal with the matter for decision without bias; iii. give each party the opportunity of adequately presenting its case; iv. observe the procedural and other rules provided for in the relevant statute; v. come to its decision with that sense of responsibility that is the necessary accompaniment of the duty to do justice." (Paragraph numbers excluded)
Counsel for Onik Energy submitted that the Magistrate erred in entertaining a strike out application by the defendants without notice to Onik Energy and in so doing denied Onik Energy procedural fairness.
Counsel for Onik Energy referred to Kapoor v State Transit Authority of NSW [2010] NSWCA 143. The brief facts in Kapoor are that when Mr Kapoor, who was not legally represented, did not appear at court on 31 January 2008, counsel for the Authority made an oral application to the judge, without notice to Mr Kapoor, for the proceedings to be dismissed for want of prosecution. The judge entertained the application and, after hearing brief submissions, reserved his decision. On 16 April 2008, the Authority then filed a notice of motion to dismiss the proceedings for want of prosecution supported by a large affidavit, returnable on 21 April 2008.
The Court of Appeal (per Handley JA, with whom Allsop P and McColl JA agreed) held that, by entertaining the oral application for want of prosecution made without notice to Mr Kapoor, the appellant was denied procedural fairness on 31 January 2008. Although this was formally cured when the Authority served its notice of motion and supporting affidavit of 16 April 2008, it was not cured in substance because the time between service and the mention date was unreasonably short. This deprived Mr Kapoor of a reasonable opportunity to review the affidavit "to ensure that nothing of relevance had been omitted, to identify any errors, and to assemble any material that he wished to put before the Court in reply", to which he was entitled. The appeal was allowed. The decision of the judge dismissing the action for want of prosecution was set aside.
Allsop P agreed with the reasons of Handley JA and added the following comments: "1 …Sections 56-60 of the Civil Procedure Act 2005 (NSW) provide ample power and flexibility, if used precisely and justly, to deal with dilatory and reluctant litigants. These provisions provide, however, no authority to deny procedural fairness. Procedural fairness is not a mere formality to be dispensed with in cases where litigants are not proceeding promptly with their claims; it is an essential element and attribute of judicial power: International Finance Trust Co Ltd v New South Wales Crime Commission [2009] HCA 49; 84 ALJR 31. The importance of procedural fairness comes to the fore in cases such as this, when judges seek to keep litigants to a proper timetable by the exercise of power under the Civil Procedure Act and the Uniform Civil Procedure Rules. Procedural fairness is a given in the exercise of such power."
On 10 April 2015, between 9.30 am and 10 am in the Local Court, the solicitor for the defendants informed the agent appearing for the solicitor for Onik Energy that he would be making submissions that the statement of claim should be struck out. The pre trial hearing took place after the luncheon adjournment.
Further, the Magistrate had on the last occasion (6 March 2015) foreshadowed potentially dismissing the statement of claim. When the matter came before the Magistrate on 10 April 2015 both parties were legally represented. The agent appearing on behalf of the solicitor for the plaintiff had been provided with written instructions by the plaintiff's solicitor that the plaintiff's lay evidence, namely the affidavits of Mr Graham and Ms Berg, were being reviewed by counsel and their evidence would be served by close of business on Monday 13 April 2015. He was also instructed that the expert's report had been served, although I accept that there was an unexpected issue before the Magistrate as to whether the annexures were properly served. It appears that the agent did not properly convey his instructions to the Magistrate and in particular that the witnesses' affidavits were to be served on 13 April 2015 so that, if the hearing date was vacated, the matter would be ready for hearing well before 5 June 2015. The plaintiff's agent, although put on notice earlier that day that the defendants' solicitor would be making submission to have the proceedings struck out, did not request an adjournment so that the plaintiff's solicitor could be present.
The Magistrate gave each party the opportunity to adequately present its case, observed ss 56 to 60 of the Civil Procedure Act 2005 (NSW), referred to the relevant UCPR rule, and took into account that, should he dismiss these proceedings, they could be recommenced at a time when the plaintiff had properly prepared its case for trial. The Magistrate came to his decision with the sense of responsibility that is the necessary accompaniment of the duty to do justice and acted judicially.
In my view, in these circumstances, the plaintiff was afforded procedural fairness.

(b) Want of prosecution - appeal ground (b)

Counsel for Onik Energy submitted that there was no evidentiary basis or an insufficient evidentiary basis before the Magistrate to sustain a finding that there was a want of prosecution by Onik Energy.
Onik Energy also says that UCPR Part 50.16(1) states that "[i]f the decision under appeal has been given after a hearing, the appeal is to be by way of rehearing". "Hearing" includes both trial and interlocutory hearing: see the definition in section 3 of the Civil Procedure Act. Further, UCPR 50.16(1) uses the term "hearing" in contradistinction to the term "hearing on the merits" which is used in UCPR 50.16(4). While the precise extent of the right to appeal depends on the wording of the statute conferring the right to appeal (see McCullin v Crawford; Ex parte Crawford (1921) 29 CLR 186 at 193; Turnbull v New South Wales Medical Board [1976] 2 NSWLR 281 at 297), there is nothing within s 40 of the Local Government Act 2007 which limits the appeal Court's receipt of further evidence for the purpose of determining the appeal. UCPR 50.16(3) provides that the higher court may receive further evidence. This Court on this appeal has, by consent, received evidence that was not before the Magistrate. It shows that the agent was advised that the lay witnesses' affidavits would be exchanged by Monday 13 April 2015.
The solicitor for the defendants received a letter from Mr Abrahams in similar terms on 9 April 2015. Mr Anderson says that as a result of receiving Mr Abrahams' letter of 9 April 2015 stating that counsel was still reviewing the lay witnesses' affidavits he remained of the view that there was no guarantee that he would receive the evidence by the following Monday.
Further, or alternatively, Onik Energy submitted that on the basis of the additional evidence adduced by the plaintiff in this appeal it is clear that as at the date of the original determination there was no want of prosecution on the part of the plaintiff and that the finding of the Magistrate was therefore wrong.
While this Court has this additional information, the difficulty is that the Magistrate was never informed that the plaintiff would serve the evidence of its lay witnesses by 13 April 2015. There was no proposal put forward by the plaintiff's agent as to when they would comply with directions concerning all the lay evidence, if at all. In my view the evidence before the Magistrate supported the making of an order dismissing the proceedings pursuant to UCPR 12.9 and the Practice Note. This ground of appeal fails.

Counsel for Onik Energy submitted that the Magistrate erred in finding that Onik Energy's expert evidence was not ready. At the hearing there was a factual dispute between the parties as to whether the annexures comprising of some 260 pages were served with the expert's report. The agent appearing for the plaintiff's solicitor was unable to assist the Court on this issue. It was clear that the expert's report had not been filed.
So far as the expert's report is concerned, the Magistrate stated that on the face of it he would have to accept that the plaintiff had raised a reasonable excuse for their expert report not being prepared, because there had been some obstacles in the form of outstanding particulars and invoices, that would be required by the expert in the preparation of his report. He also stated that the issue had been remedied as a draft expert report "if I can put it that way" had been served. The Magistrate continued that the expert report had not been finalised and had not been filed in the Court or properly served upon the solicitor for the defendants. (T11.17-24). There was no dispute that the expert report was not filed. However, there was a factual dispute as to whether the annexures comprising of 260 pages were served on the defendant's solicitor. The plaintiff's agent was not able to assist. Hence, the Magistrate was entitled to come to the conclusion he did. This ground of appeal fails.

(d) Onik Energy's failure to file and serve lay evidence - appeal ground (d)

Counsel for Onik Energy submitted that the finding that there was a want of prosecution by reason of Onik Energy's failure to file and serve its lay evidence cannot be sustained as the finding was procured due to the defendants' legal representative misleading the Court. This is a very serious allegation. It is not made out.
In a letter dated 9 April 2015, the plaintiff's solicitor, Mr Abrahams, wrote to Mr Anderson stating that: "the evidence will be served in the amount of time it takes to be sworn once [the plaintiff's counsel] has completed his review of the affidavits today. Mr Abrahams will be out office (sic) from around 3pm today for the Jewish holyday this evening and tomorrow and will return to office on Monday 13 April. We will serve the evidence by close of business on Monday 13 April 2015."
Mr Anderson's evidence is that he formed the opinion that, by stating that counsel was still reviewing the lay witness affidavits, Mr Abrahams remained of the view that there was no guarantee that Mr Anderson would receive the evidence by the following Monday. In Mr Anderson's opinion, given that Onik Energy was represented at the directions hearing by Mr Middleton, Mr Anderson did not consider that it was his obligation to inform the Court as to his understanding of the state of readiness of Onik Energy's evidence or when its evidence was going to be filed. Had Mr Middleton not appeared, the approach that Mr Anderson would have taken would have been different. He would have had an obligation to inform the Court what he had been told by Mr Abrahams about lay witness statements and expert's report.
Mr Anderson stated that during the telephone conversation with Mr Abrahams, Mr Anderson did not form an opinion as to what he would do at the directions hearing in light of Onik Energy's failure to serve evidence. Mr Anderson cannot recall when he decided that he would make submissions at the directions hearing that Onik Energy's statement of claim should be struck out.
Mr Anderson informed Mr Middleton some hours before the hearing came on that he would be applying to have the proceedings struck out. I accept that Mr Anderson was aware that Mr Abrahams would be unavailable on 10 April 2015. Mr Anderson should have informed Mr Abrahams that he was considering making a submission to the Magistrate that the plaintiff's proceedings be struck out but had not made up his mind as a courtesy.

(e) Application to vacate hearing date - appeal ground (e)

Counsel for Onik Energy submitted that the Magistrate erred in finding that an application to vacate the hearing date had been made by Onik Energy as it was not ready to proceed. As previously stated, the Magistrate was never informed as to when the lay statements could be served. While there was still time to serve these statements and sort out the expert report and file it, there was a paucity of information provided to the Magistrate on this topic. As the Magistrate acceded to the defendant's request to dismiss the statement of claim there was no utility in retaining the hearing date. There was no error of law. This ground of appeal fails.

Other matters

Finally, counsel for the plaintiff raised an issue that the Magistrate had regard to irrelevant considerations, namely, the joining of three defendants in the one statement of claim. This was a relevant factor to be taken into account in deciding to dismiss the plaintiff's statement of claim and determining whether Onik Energy would be ready for the hearing on 5 June 2016. Further, counsel submitted that the Magistrate failed to have regard to ss 57, 58 and 61 of the Civil Procedure Act and referred to Hans Pet Constructions Pty Ltd v Cassar [2009] NSWCA 230. The Magistrate did specifically refer to s 56 of the Civil Procedure Act. A fair reading of the judgment reveals that the Magistrate also had regard to the matters raised in ss 57, 58 and 61 of the Civil Procedure Act.
The result is that the appeal is dismissed. The judgment and orders of his Honour Magistrate Dunleavy dated 10 April 2015 are affirmed.

Costs

Costs are discretionary. Costs usually follow the event. The plaintiff is to pay the defendants' costs on an ordinary basis as agreed or assessed.

The Court orders that: (1) Leave to appeal is refused. (2) The appeal is dismissed. (3) The judgment and orders of his Honour Magistrate Dunleavy dated 10 April 2015 are affirmed. (4) The summons filed 5 May 2015 is dismissed. (5) The plaintiff is to pay the defendants' costs on an ordinary basis as agreed or assessed.

DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 11 March 2016

Civil Procedure Rules 2005(NSW)

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